Investors Head For Hills Ahead of the Weekend

Investors headed for the hills ahead of the weekend, ignoring an impressive
string of earnings results and favorable economic numbers this week. A
favorable consumer price index slipped 0.1% in August, suggesting inflation
may be under control, but it wasn’t enough to ease worries of soaring
energy prices that look sure to reverse the falling CPI trend in September.
Blue chips and tech stocks alike were hit hard by profit taking across the
board, sending the Dow plummeting 160.47 to 10.927.00, while the Nasdaq
sank 78.85 to 3,835.01, down 4% on the week. The ISDEX fell
in sympathy, down 1.39% for the day.

Oracle tumbled 6 5/8 to 78 5/16 even after soundly
thumping analysts’ quarterly earnings forecasts. The world’s second largest
software firm reported results of $0.17 per share, four cents ahead of
estimates, while announcing a 2-for-1 stock split set to take effect
October 13. But investors sold the news, sending the stock crumbling 11%
for September.

Investors cheered earnings from another software maker, pushing Adobe
Systems up 7 1/4 to 132 5/8, or 6% on the day. Shares
received a boost following a 2-for-1 stock split announcement and Q2
earnings of $0.57 per share, a nickel better than Wall Street estimates.

Investors jeered earnings results from Linux services firm Red Hat , despite edging past consensus forecasts, reporting a narrower
than expected loss of a penny. Shares took a fall, down 4 1/16 to 21 3/16,
or 16%, following a downgrade by ABN Amro to a “market perform” from a
“buy,” citing revenue numbers that met only the minimum expectations.

PSINet crumbled to a new 52-week low, showing signs
that the ISP may be struggling to make the transition to broadband Net
access. Shares dropped 2 11/16 to 11 3/4, after the company announced that it
would need to raise an additional $600 million by the end of next year in
order to finance future growth. Morgan Stanley wasted little time
downgrading the stock to “neutral” from an “outperform” following the
troubling news.

Bay area-based MyPoints.com shares nearly received a
25% haircut, down 2 3/8 to 7 5/8, after Merrill Lynch warned clients that
the direct e-mail marketer’s third quarter numbers would be vulnerable to a
overall slump in online advertising.

Shares of CMGI slipped 2 3/8 to 37 3/4, after the
incubator’s majority-owned subsidiary AltaVista said it would slash 225
jobs, or a staggering quarter of its total workforce. The portal announced
it would exit the Internet media network business and concentrate on its
search technology, hoping the change of direction and path to profitability
will be enough to get its struggling IPO plans off the ground.

Paul Shread is on assignment. His technical commentary will resume
Monday, September 18.